In recent years, Ireland has experienced a rental shortage that has left many struggling to find affordable and suitable accommodation. This problem has affected everyone from students to families and has resulted in significant stress and financial strain for those impacted. The rental shortage has been attributed to a variety of factors, including a lack of supply, high demand, and government policies.
Rental shortages, where does the issue come from?
One of the primary factors contributing to the rental shortage in Ireland is the lack of available rental properties. This shortage can be attributed to several factors, it all stems from the economic recession of 2008, which led to a decline in construction and development projects. As a result, many developers and investors halted their plans to build new properties, leading to a significant shortage of available rental units.
This has been further exacerbated in recent months with inflation and construction material costs skyrocketing. It no longer is as profitable to build as before so families are opting for rentals, to save on money and avoid financial risks.
In Dublin for example, as well as other urban areas, the supply of properties can be seen in property portals. Using such websites have become 100% necessary when scouting for a home, you can see this here, by filtering the available options, you get a comprehensive idea of where the price rises are the most intense. This way, you can catch a good deal as soon as it goes live on the site. Using such tools and getting this head start seems to be the one thing helping people with their search.
The country has a historic low rate of homeownership.
Additionally, Ireland has a low rate of homeownership, which means that there is a higher demand for rental properties. Compared to other EU countries for example, the Irish rank very low on the scale of homeownership, due to a wide range of reasons, both historic and economic. This has contributed to a higher demand for rental properties, exacerbating the shortage issue.
Demand is increasing and the supply cannot keep up.
Another factor contributing to the shortage is the increasing demand for rental properties. The high demand can be attributed to several factors, including population growth, immigration, and changing attitudes towards homeownership. In recent years, Ireland has experienced significant population growth, particularly in urban areas, which has put pressure on the housing market.
The effect of government policies.
The shortage of rental properties in Ireland has also been exacerbated by governments. For example, by introducing policies aimed at encouraging landlords to sell their properties, rather than renting them out. This provides tax relief to landlords who sell their properties, but not to those who continue to rent them out.
This policy has resulted in a significant reduction in the number of rental properties available, as landlords choose to sell their properties rather than continuing to rent them out. Additionally, government policies aimed at regulating the rental market, such as rent control measures, have discouraged landlords from investing in new rental properties, further exacerbating the shortage issue.
How does this affect the people of Ireland?
The rental shortage in Ireland has had significant consequences for those impacted. Rent prices have skyrocketed, making it difficult for many people to afford suitable accommodation. This has resulted in a significant increase in homelessness, particularly in urban areas, where the rental shortage is most acute.
The shortage has also had an impact on the wider economy. Many businesses, particularly in the technology sector, have cited the rental shortage as a major barrier to growth. Without sufficient rental properties available, these businesses struggle to attract and retain employees, particularly those with families, who require suitable accommodation.
What solutions can be implemented?
To address the rental shortage in Ireland, several measures have been proposed. One such measure is increasing the supply of rental properties by investing in construction and development projects. This would involve the government providing funding and support for developers and investors to build new rental units, which would increase the supply of available properties and help to alleviate the shortage issue.
Additionally, policies aimed at encouraging homeownership, such as tax incentives and government-backed mortgage schemes, could help to reduce the demand for rental properties and alleviate the pressure on the rental market.
Finally, the government could consider revising its policies towards the rental market, particularly those that discourage landlords from investing in new rental properties to avoid speculation and gentrification.
To sum up, Ireland is facing a multifaceted and complex issue that stems back from years ago, that is currently being exacerbated by political, geopolitical and economic events. A solution must be found and regulatory measures should be followed to ensure access to affordable and quality housing.